assignments may also be initiated by the War Contracts Board or by the Assignments and Statistics Branch of its own motion. A case will not be withdrawn from any Department without that Department's approval except by express direction of the War Contracts Board, nor will a reassignment become effective if objection to such reassignment is filed in writing by a Department with the Assignments and Statistics Branch within 10 days following receipt of such reassignment unless such objection is overruled by action of the War Contracts Board. The Assignments and Statistics Branch may withdraw an assignment from a War Department Service, without its approval. [RR 205.1]

§ 1602.205-2 Transfer of information on reassignments. Upon notice that a case has been reassigned, there will be transmitted directly to the Department or Service holding the reassignment all information obtained from the contractor relating to the fiscal period subject to renegotiation. Upon request, the file will be transmitted directly to the field or section office to which the reassignment is made. [RR 205.2]

$1602.206 Cancellation of assignment. (RR 206]

§ 1602.206-1 General. (a) The War Contracts Board will cancel the assignment of any contractor on the ground that the contractor is not subject to renegotiation or on the ground that it clearly appears that the profits realized by the contractor were not excessive or when clearly appropriate under circumstances disclosed. Ordinarily, assignment will not be cancelled except upon the recommendation or concurrence of the Department or Service to which the assignment was issued.

(b) Cancellations will not be issued in doubtful cases or in the absence of sufficient information in writing upon which an intelligent determination can be based. Representations of fact by contractors, however, will be accepted at full value in the absence of contradictory evidence, and if not obviously subject to question or doubt.

should take any action which may be necessary to preserve the Government's rights against the contractor.

(d) Cancellation of assignment does not constitute a formal clearance of a contractor's responsibilities under the act. If a contractor desires such a clearance, renegotiation must be completed and a clearance issued in the manner hereinafter provided. [RR 206.1]

§ 1602.206-2 Form for submission of request. The Department or Service submitting to the War Contracts Board a request for cancellation will accompany such request with a statement in substantially the following form:

The information submitted herewith has been obtained from the subject contractor. It has been considered and it is believed by this office to be substantially representative of the operations of the contractor for the fiscal period referred to. This office is of the opinion that (excessive profits within the sense of the Renegotiation Act and the principles applicable thereto have not been realized by the contractor during the said period) (aggregate sales by the contractor, and by all persons under the control of or controlling or under common control with the contractor, under contracts with the Departments (as defined in the Renegotiation Act) and subcontracts thereunder, did not exceed the statutory minimum).' (Other Reason:) Cancellation of the assignment of the contractor for renegotiation is recommended and requested.

The Contractor's fiscal year ended_-----[RR 206.2]

§ 1602.206-3 When not subject to act; evidence required. When cancellation of assignment is sought on the ground that the aggregate sales of the contractor for the fiscal year did not exceed the statutory minimum prescribed by subsection (c) (6) of the 1943 act, the Department or Service requesting the cancellation may:

(a) Submit a statement to that effect on its own responsibility, or

(b) Submit a statement by the contractor in the form appearing in § 1607.704-1, or

(c) Submit a statement of the fact that the contractor has not filed a mandatory financial statement in conformity with subsection (c) (5) (A) of the 1943 act, and a statement of the Department or Service to the effect that the requirements of subsection (c) (5) (A)

'Insert applicable clause.

were

called to the attention of the contractor preceding the application for the cancellation. [RR 206.3]

§ 1602.206-4 When no excessive profits; evidence required. When the cancellation of assignment is sought on the ground that no excessive profits have been realized on renegotiable business, the minimum information required for consideration by the War Contracts Board will ordinarily be that called for by the "Standard Form of Contractor's Report" (see § 1607.701-1) including section B thereof. When necessary, information will be required as to the proper allocation of costs and expenses applicable to renegotiable and other sales. [RR 206.4]

§ 1602.206-5 Notification. If the Assignments and Statistics Branch, acting for the War Contracts Board, finds that the evidence submitted is sufficient, notice of cancellation of the assignment will be sent to the Department or Service to which the case is assigned. If there is any difference of opinion concerning the sufficiency of the evidence submitted in connection with an application for cancellation, the matter shall be referred to the War Contracts Board for decision. Use of the form set forth at § 1607.704-2 is authorized for the purpose of advising the contractor of the cancellation of his assignment. IRR 206.5]

§ 1602.206-6 Reinstatement. Any case, the assignment of which has been cancelled, may be reinstated if at any later time such action appears appropriate. Such reinstatement may be made by the War Contracts Board on its own motion or at the suggestion of any Department or Service. [RR 206.6]

Subpart B-Preliminary Information Required of Contractors

This

§ 1602.220 Scope of subpart. subpart deals with mandatory filing of financial statements required of the contractor and other preliminary information. [RR 220]

§ 1602.221 Statutory provision. Subsection (c) (5) (A) of the 1943 act provides as follows:

(5) (A) Every contractor and subcontractor who holds contracts or subcontracts, to which the provisions of this subsection are applicable, shall, in such form and detail as the Board may by regulations prescribe, file with the Board on or before the first day of the fourth month following the close of the

fiscal year (or if such fiscal year has closed on the date of the enactment of the Revenue Act of 1943, on or before the first day of the fourth month following the month in which such date of enactment falls) a financial statement setting forth such information as the Board may by regulations prescribe as necessary to carry out this section. In addition to the statement required under the preceding sentence, every such contractor or subcontractor shall, at such time or times and in such form and detail as the Board may by regulations prescribe, furnish the Board any information, records, or data which is determined by the Board to be necessary to carry out this section. Any person who willfully fails or refuses to furnish any statement, information, records, or data required of them under this subsection, or who knowingly furnishes any such statement, information, records, or data containing information which is false or misleading in any material respect, shall, upon conviction thereof, be punished by a fine of not more than $10,000 or imprisonment for not more than two years, or both.

[RR 221]

§ 1602.222 Filing of mandatory financial statement. In accordance with the requirements of the first sentence of subsection (c) (5) (A) of the Renegotiation Act of 1943:

(a) The "Standard Form of Contractor's Report" (as set forth in § 1607.701-1) is hereby prescribed as the form of mandatory financial statement generally required to be filed by contractors and subcontractors.

(b) The "Standard Form of Contractor's Report (For Construction Contractors, Architects and Engineers)" (as set forth in § 1607.701-3) is hereby prescribed as the form of mandatory financial statement required to be filed by contractors and subcontractors principally engaged in the construction busi

ness.

(c) The "Standard Form of Contractor's Report (For Agents, Brokers and Sales Engineers)" (as set forth in § 1607.701-5) is hereby prescribed as the mandatory form of financial statement required to be filed by sales agents and others whose principal business falls within the definition of subcontracts as set forth in subsection (a) (5) (B) of the 1943 act.

(d) There is hereby prescribed as the form of mandatory financial statement required to be filed by public utilities (including but not limited to those furnishing gas, electric power, rail, air or water transportation, telegraph, tele

phone, cable or radio communication) and by steamship operating companies, a statement containing the following: Name and address of contractor. Names of companies, if any, under the control of, or controlling, or under common control with the contractor. Nature of principal business. Date of expiration of fiscal year. Balance Sheet, Profit and Loss Statement and Surplus Statement of the contractor for latest completed fiscal year. Declaration by the contractor that it will furnish such further and additional information as may be required by or on behalf of the War Contracts Board. Such statement shall be executed on behalf of the contractor by his duly authorized representative and shall contain a certificate that the representations thereby submitted are true and correct to the best of his knowledge and belief. [RR 222]

§ 1602.222-1 Sufficiency of contents. (a) Except as hereinafter stated, the forms of "Standard Form of Contractor's Report" are required to be prepared in duplicate in accordance with the instructions which relate to them respectively and which appear in §§ 1607.701-2, 1607.701-4 and 1607.701-C. The Reports are required to comprise all the information and exhibits specified by the forms and the instructions. However, if all the information called for by the appropriate "Standard Form of Contractor's Report" has been furnished by the contractor to an Agency authorized to conduct renegotiation proceedings under the 1943 act, the contractor may complete the "Standard Form of Contractor's Report" by incorporating by reference the information so furnished and making a specific statement of the time and place of such filing. In such case, the fact that the information has been received will be certified to by the renegotiating Agency on the copy of the "Standard Form of Contractor's Report" which it will forward to the War Contracts Board within sixty days after the date of receipt of the Report by such Agency. A "Standard Form of Contractor's Report" so prepared and filed wil be deemed to constitute a sufficient compliance with the mandatory filing requirements of this §§ 1602.222 to 1602.222-6 in the absence of a notice of insufficiency sent to the contractor within 90 days after the Report has been filed.

(b) Where a Department to which a contractor has been assigned for rene

gotiation or the Assignments and Statistics Branch determines that it is not feasible for a contractor to furnish all of the information provided for in the Standard Form of Contractor's Report on or before the date specified in the 1943 act, such contractor may file such report containing such information as he can feasibly supply, which in all cases shall include at least the contractor's balance sheet profit and loss statement and surplus statement for his latest completed fiscal year and shall state in such report that the information not contained therein or such other information as the Department or such Branch may require, will be furnished within such period as the Department or such Branch may designate. In any such case the filing of such a statement on or before the date specified in the act and its acceptance by such Department or such Branch shall constitute compliance by the contractor with the provisions of subsection (c) (5) (A). [RR 222.1]

§ 1602.222-2 Time for filing. The mandatory financial statements hereby prescribed shall be filed on or before the first day of the fourth month following the close of the L.scal year of the contractor (or if such fiscal year had been closed on February 25, 1944, on or before the first day of June, 1944, whether or not any demand has been made by the War Contracts Board or by any person on its behalf. [RR 222.2]

§ 1602.222-3 Place for filing. Except as stated herein, the mandatory financial statements hereby prescribed shall be filed in duplicate with the War Contracts Price Adjustment Board, Assignments and Statistics Branch, Room 3D 573, The Pentagon, Washington 25, D. C. Where the contractor has received a "Letter of Preliminary Inquiry" (see § 1602.223) and a "Standard Form of Contractor's Report" from a renegotiating Agency, the mandatory financial statements hereby prescribed shall be filed in duplicate with that Agency. The renegotiating Agency will forward one copy to the War Contracts Board within sixty days after receipt of the Report by the Renegotiating Agency. [RR 222.3]

§ 1602.222-4 Availability of forms. Copies of the forms above mentioned may be obtained upon request to the Assignments and Statistics Branch or to any of the Price Adjustment Boards or Sections of the several Departments au

thorized to conduct renegotiation proceedings. [RR 222.4]

§ 1602.222-5 Effect of filing mandatory financial statements. The filing of a mandatory financial statement in accordance with the provisions of this § 1602.222 will not relieve any contractor or subcontractor of the duty to furnish such other information, records or data which are determined by the War Contracts Board or its representatives to be necessary to carry out its responsibilities under the act. [RR 222.5]

§ 1602.222-6 Filing of mandatory financial statements by parent and subsidiary corporations on a consolidated basis. Parent and subsidiary corporations which constitute an "affiliated group" as defined in subsection (d) of section 141 of the Internal Revenue Code may satisfy the requirements for filing of mandatory financial statements under the first sentence of subsection (c) (5) (A) of the Renegotiation Act of 1943 by filing a "Standard Form of Contractor's Report" on a consolidated basis. When such a consolidated "Standard Form of Contractor's Report" is filed there shall also be filed a "Standard Form of Contractor's Report" for each subsidiary corporation (except as noted below) but any such subsidiary corporation report may be completed by writing thereon a statement that a consolidated report has been filed by the parent company. Where any such subsidiary corporation has not received or accrued during the applicable period any amount whatever under renegotiable contracts with the Departments and subcontracts (i. e., contracts or subcontracts not exempt from renegotiation by contractual provision pursuant to subsection (i) or contracts or subcontracts which are not exempted under subsection (i) of the Renegotiation Act of 1943), no report need be filed by it. [RR 222.6]

§ 1602.223 Letter of preliminary inquiry. [RR 223]

§ 1602.223-1 Unassigned contractors. The War Contracts Board, through the Assignments and Statistics Branch, may send to contractors and subcontractors who are identified by it as probably subject to renegotiation proceedings (except those who have been previously assigned) a "Letter of Preliminary Inquiry" (see §§ 1607.702-1 and 1607.702-3). Since the form appearing at § 1607.702-1 allows a period of thirty days for answering, it

will not be used within 30 days of the time for filing prescribed by the 1943 act. The "Letter of Preliminary Inquiry," sent by the Assignments and Statistics Branch, will be to determine whether or not the contractor should be assigned for renegotiation and to what Department or Service, if any, such assignment should be made. The filing of the "Standard Form of Contractor's Report" will constitute compliance with the requirement for mandatory filing under § 1602.222, if filed within the time prescribed by the 1943 act. [RR 223.11

§ 1602.223-2 Assigned contractors. The Departments and Services may send to contractors who have been assigned to them for 1943 renegotiation the "Letter of Preliminary Inquiry" (see § 1607.702-2) and the appropriate Standard Form of Contractor's Report. In such cases, the filing of the Standard Form of Contractor's Report will constitute compliance with the requirements of mandatory filing under § 1602.222 if filed within the time prescribed by the 1943 act, and, with respect to assigned cases, will enable a determination to be made as to whether further renegotiation proceedings will be necessary. [RR 223.2]

§ 1602.223-3 Follow-up. The form appearing at § 1607.702-4 will be used with respect to contractors who have not made response to a "Letter of Preliminary Inquiry" within the time prescribed for filing under subsection (c) (5) (A) of the 1943 act. Such follow-up letters will be sent by the office which sent the "Letter of Preliminary Inquiry" with appropriate variation in signature. [RR 223.3]

§ 1602.224 Contractor's information and work sheet for renegotiation. The War Contracts Board, through the Department or Service to which any contractor or subcontractor is assigned, may send to such contractor or subcontractor a form designed to assist him in preparing information when it is contemplated that formal renegotiation proceedings will be carried to conclusion (see § 1602.242). The form prepared for the use of supply contractors is the "Contractor's Information and Work Sheet for Renegotiation" (see § 1607.722) and that for construction contractors, architects and engineers is the "Construction Contractors, Architects, and Engineers Information and Work Sheet for Renegotiation" (see § 1607.724). [RR 224]

Subpart C-Preparation for Renegotia

tion

§ 1602.230 Scope of subpart. This subpart contains instructions relating to preparation for renegotiation. [RR 2301

§ 1602.231 Negotiators. [RR 231] § 1602.231-1 Disqualification of negotiator. Renegotiation will not be carried on by a negotiator on behalf of the Government, who is, or within the preceding five years has been, an officer, director, partner, employee or in control of the contractor being renegotiated. A member of a price adjustment board who is, or within the preceding five years has been, an officer, director, partner, employee or in control of the contractor being renegotiated, will not sit as a member of such board while it is passing on the case of such contractor. Each negotiator, or member of a price adjustment board, will determine whether these provisions bar him from acting in a case. Other circumstances may exist which would make it inadvisable for a negotiator or member of a price adjustment board to act in a case and such situations can best be determined by the negotiator or member involved. Accordingly, a negotiator or member of a price adjustment board has the responsibility of determining whether he should refrain from acting in a particular case under the circumstances. [RR 231.11

Subpart D-Conduct of Renegotiation

§ 1602.240 Scope of subpart. This subpart includes instructions on the conduct of renegotiation. [RR 240]

§ 1602.241 Commencement of reneproceedings gotiation. Renegotiation

are commenced by the mailing, by registered mail, of reasonable notice of the time and place of a conference to be held with respect to the renegotiation. (See § 1608.801-3.) A form which may be used for such purpose is set forth in § 1607.721. Such notice shall be given in all cases of renegotiations with respect to fiscal years ending after June 30, 1943, and in the absence of unusual circumstances such notice shall be given prior to the time a conference is held for the purpose of discussing the refund. In any case where a conference is unnecessary by reason of the progress which has been made in renegotiation prior to the sending out of the formal notice, the notice should be sent, but the confer

ence can be waived by agreement with the contractor. [RR 241]

§ 1602.242 Data presented by contractor. The contractor should be prepared to present all the factual data pertinent to the consideration of his case. In this connection, reference is made to the information required in the mandatory financial statement (§ 1602.220 and following) and to other chapters hereof. Suitable forms, designated to help contractors in assembling data of significance in renegotiation, are set out at §§ 1607.722 and 1607.724. These forms are not mandatory, but indicate the type of information required of a contractor to supplement what he supplied on the mandatory financial statement (see § 1607.701). Manufacturers and supply contractors should use the "Contractor's Information and Work Sheet for Renegotiation" (see § 1607.722), and construction contractors, architects and engineers should use the "Construction Contractors, Architects, and Engineers Information and Work Sheet for Renegotiation" (see § 1607.724). (See also § 1602.224.) [RR 242]

§ 1602.243

Process of renegotiation. The general principles applicable to the conduct of renegotiation and the process of arriving at a renegotiation determination are discussed in § 1604.402-3. [RR 243]

Subpart E-Completion of Renegotiation

§ 1602.250 Scope of subpart. This subpart refers to the steps taken upon the completion of a renegotiation resulting in a voluntary agreement, to the administration of agreements and unilateral determinations, and to progress reports. [RR 250]

§ 1602.251 Preparation of agreement. When a tentative settlement has been agreed upon, the Department conducting the renegotiation will promptly prepare a form of agreement (see Subpart A of Part 1605). [RR 251]

§ 1602.252 Preparation of statement to contractor. Subpart B of Part 1605 deals with the furnishing of a statement to the contractor. [RR 252]

§ 1602.253 Administration of agreements. Administration of voluntary agreements or of unilateral determinations by the Department to which the contractor was assigned for renegotia